Question
company y's bond is priced at $987.50 today, has an annual coupon of 3.5%, a par value of $1000, and matures in 4 years. a)
company y's bond is priced at $987.50 today, has an annual coupon of 3.5%, a par value of $1000, and matures in 4 years.
a) What is the bonds duration?
| Year | Cash Flow | PV Factor | PV | PV x t |
| 1 | ||||
| 2 | ||||
| 3 | ||||
| 4 | ||||
b) If market ields on similar bonds fall to 3.2%, what is the change in the price of the bond using the modified duration approximation. Stat you answer in both percent and dollars
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Managing The Audit Function A Corporate Audit Department Procedures Guide
Authors: Michael P. Cangemi
2nd Edition
0471012556, 978-0471012559
